Multiple Choice
Nic is a great basketball player with a long professional career in front of him.He plays for a European professional team that has made him a very interesting offer.If he will take a "below market" salary beginning one year from today,they will guarantee a 5% annual raise forever - even after he stops playing ball.If the offer is for a $5,000,000 salary to be received one year from today with subsequent payments as described,what is the present value of the contract offer if the cash flows should be discounted at a rate of 12%?
A) $71,428,571
B) $75,000,000
C) $41,666,667
D) $43,750,000
Correct Answer:
Verified
Correct Answer:
Verified
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